In all industries but it is easier to see in the commodities business, brides or payments are paid to the ruling head of government or their associates. The developed countries often pretend that people do not bride in their countries, but to do business in a non developed countries is normal practice to pay brides. A number of years ago, the ruling family of Indonesia – the Suharto President was known as Mr. 10%. A country doing business in the country had to give either the President or family members 10% of their business in order for the business to operate profitably. If the country said no, then the President would use government regulations to hamper the business.

One of the biggest global commodity companies is known as Glencore with operations in London and Baar,Switzerland. The operations in London are centered around the London commodity exchanges where the price of commodities are traded everyday. In England, the West Africa desk, bought and sold crude oil from countries across Africa, paid brides of $29 million to secure preferential access to oil from Nigeria, Cameroon, South Sudan, Equitorial Guinea and the Ivory Coast.

In an article written by Geoffrey York, British Judge Peter Fraser, ruled Glencore to pay $314 million in financial penalties in its plan to bribe 5 African countries. The fine includes a massive fine, an order to confiscate profits that it obtained from bribery and legal costs – is the largest ever awarded in a corporate criminal conviction in Britain, according to the government’s Serious Fraud Office (SFO) which launched the Glencore investigation in 2019.

In the company’s financial reports, the bribes were often disguised as service fees, signing bonuses, success fees or office expenses. The SFO said its investigation of the Glencore traders found a trail of text messages, large cash withdrawls and deliberately concealed payments. The SFO is still pursuing an investigation of 2 people in the Business Ethics Officers in Glencore’s London office. Of the 17 people at Glencore, 11 are former employees.

Glencore Chairman Kalidas Madhavpeddi, said the conduct that took place was inexcusable and has no place in Glencore.

Linking to dividend paying stocks, there are ample opportunities to use bribery in the business world and many are former employees because the company lets them go for the greater good of the company. If you see a high turnover of senior employees, you have to wonder why? Are short term profits worth it? Is the lifestyle worth it? In the case of Glencore, did they make excessive profits that allows them to stretch out the court proceedings and pay a partial fine? When you purchase dividend paying stocks, you understand bribes are paid to increase profits, but you want companies that can pay profits for a long period of time.

There are more questions than answers, till the next time – to raising questions.